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I have a crude idea in my head that I want people to eithet refine or dismantle.
The big problem Africa has with mobilising its natural resources to achieve results is that the mobilisation invariably needs money to get this done - and money is something we don't have much of.
The big problem Africa has with mobilising its natural resources to achieve results is that the mobilisation invariably needs money to get this done - and money is something we don't have much of.
What this means is that for example Zambia and Kenya might have all the natural (and human) resources to build a railway to each other, but without x bn dollars, those resources cannot be utilised and will lie fallow until they are exported cheaply for other people's benefit.
They also cannot use quantitative easing (printing money) as a solution because the Kenyan shilling and the Zambian kwacha are not mutually convertible.
In other words, without vast amounts of USD or GBP or EUR or JPY or RMB, Africa currently CANNOT build itself.
In other words, without vast amounts of USD or GBP or EUR or JPY or RMB, Africa currently CANNOT build itself.
So my idea/question/crude hypothesis is this: Is it possible to create some sort of continental resource swap mechanism that makes it possible for large infrastructure projects to be possible without needing to use forex which we simply don't have?
Hear me out on this...
Hear me out on this...
'Money' itself is just an idea - it isn't real. The difference between a cowrie shell and a dollar note is that you believe one is money and the other is worthless. In fact they are both objectively worthless.
Look at it this way:
Look at it this way:
The US Federal Reserve created $1trn out of thin air earlier this year, and nothing happened. No hyperinflation, nothing - because the market believes that the US economy and the world economy can absorb $1trn extra liquidity.
It is all based on belief and little else.
It is all based on belief and little else.
Now if African countries could trade resources with each other for infrastructural development without using money, with the only expense being to pay the humans involved (an expense they can afford), does that compromise their economies or fiscal position?
I don't think so.
I don't think so.
I think the opportunity cost of the reduced resource export revenue will be offset by the value of GDP growth sparked by an infrastructure boom.
If Togo loses $1bn in resource exports to gain $12bn in GDP uplift through construction aided by resource swaps, that's a good deal IMO
If Togo loses $1bn in resource exports to gain $12bn in GDP uplift through construction aided by resource swaps, that's a good deal IMO
Basically my idea is to change the paradigm of African development from "build $100bn of infrastructure using $9bn annual export revenue" - which will take forever - to "bypass the need for USD altogether and mobilise resources across borders in a different way."
This could be achieved theoretically using a network of cross-continental currency swap agreements that make our 42 national currencies mutually convertible, and then introducing a very heavily regulated form of QE.
HOWEVER...and this is the important bit...
HOWEVER...and this is the important bit...
Such a framework must NEVER be overseen, agreed on, or controlled in any way by politicians.
Muhammadu Buhari, John Magufuli, Uhuru Kenyatta, Omar Bongo etc must NEVER EVER EVERRRRR have ANY kind of control over it because their involvement guarantees its catastrophic failure.
Muhammadu Buhari, John Magufuli, Uhuru Kenyatta, Omar Bongo etc must NEVER EVER EVERRRRR have ANY kind of control over it because their involvement guarantees its catastrophic failure.
